Question: A researcher obtained a sample of 125 security analysts and
A researcher obtained a sample of 125 security analysts and asked each analyst to select four stocks on the New York Stock Exchange that were expected to outperform the Standard and Poor’s Index over a 3- month period. One theory suggests that the securities analysts would be expected to do no better than chance. Hence, the number of correct guesses from the four selected stocks for any analyst would have a binomial distribution with n = 4 and π = .5 yield probabilities, as shown here:
The number of analysts’ selections that outperformed the Standard and Poor’s Index are given here:
Do the data support the contention that the analysts’ performance is different from just randomly selecting four stocks?
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